Irwin said he had instigated the merger after 36 years of running a gallery in Queen Street, Woollahra, because of the high cost of rent and continuing tough times in the art market. ''Galleries are closing all over the place. I didn't want to close,'' he said. ''Here we're basically halving the costs of running the business.''

Both gallery owners had to let go of staff and reduced the number of artists they show. ''I think in these times one would be inclined to cut back on artists anyhow because not everyone is selling as well as they might have done,'' Irwin said.

But he said the combined mailing list of the new gallery would introduce new customers to senior artists and potentially boost sales. ''I'm sure Harding will sell half to my clients and half to his.''

Irwin said the federal government's resale royalties scheme - which aims to give visual artists a small percentage every time their work is resold - and the tightening of rules governing art purchases by superannuation funds have contributed to a downturn in the art market.

''I'm sure if the Liberal Party gets in, there will be a boost in sales of 15 per cent immediately, but then it will drop back,'' he said. There was more confidence in the market but ''we only need Spain and Greece to mess up and we're in the shit again'', Irwin said.

Nicholas Harding Figures, Flora and Landscape is on at Olsen Irwin until March 10.

This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.